EGG Scan for July 17th

The up and down trading continues with today on the upside. Investors take earning news over worry about Yellen comments. There is some rotation underway again… growth to value has started with the worries building relative to valuations and bubble talks emerging again. The Fed comments were the proverbial straw this time, but the issue has been building. That said, it is important to remember that what many deem to be an overbought market can remain that way longer than many expect. We can’t drop our guard, but we cannot spend our time every day micro analyzing the data to the point of inactivity. It is all about focus and effort relative to the discipline we act upon, and managing any downside risk as it arises.

See Trading Notes for July 16th tomorrow morning for further comments to what is moving.

Running the EGG Scans – First the daily winners…

SVXY – the short volatility trade is back again with a move to the current highs. Lack of follow through on the Yellen worries pushed the VIX back towards the 11 mark and the short trade higher.

SCO – long crude oil was in the scan today as the commodity bounces on supply data. That reignited the speculation on higher demand and supply shortages at the hands of the geopolitical issues in Russia and Iraq. Watching for a possible upside follow through and trade on the news.

Financials produced a solid upside bounce on bank earnings to start the week, but BAC laid an egg today on earnings and the sector sold off again. It will take some patience to see how this unfolds. If the negative sentiment continues SKF is the short ETF for the broad sector.

TUR – (Turkey) turning higher as some calm prevails over the issues with oil and economic picture.

Energy came back to life and made a showing again on the scans. Take the opportunities as the follow through in the sector.

China (YINN) back on the upside today with no test to speak of today. Next level to clear is discussed below.

Current EGG:

We posted China (FXI) as the EGG potential to start the trading week. We did gap higher on Monday as noted, but just as importantly we held the move the last two days. With resistance at the $38.50 level (52 week moving average on weekly chart is resistance. The downtrend line is an issue as well just overhead. Considering make the adjustments on the entry at $38.60 for the entry on FXI if we follow through tomorrow on the upside. I will post any update in the morning as we see how China trades overnight. Willing to be patient as we see how this unfold over the next couple of days.